We’re off to Australia

There are lots of guides on setting up business in Australia, but you just want the facts, right?

Fact 1: Setting up a business in Australia is easy. The process is simple and the cost can be as low as A$600.

Fact 2: Most foreign businesses setting up in Australia incorporate a proprietary company limited by shares. This type of company is called a private company.

Fact 3: Australia has a national company registration scheme, but you still must choose one of the States or Territories as the place of incorporation. The current trend is to choose Victoria, the ACT or Queensland that have no stamp duty on the sale of shares.

Fact 4: The name you use for your company must be unique. It can be similar to, but not the same as, any other business already registered in Australia. You need to add the designation “Pty Ltd” or “Pty Limited”.

Fact 5: A private company can have between 1 and 50 shareholders. More than 50 shareholders and you need to step up to a public company. The shareholders can be foreign companies or individuals. There are no restrictions on foreign ownership of shares, but foreign ownership can restrict investment activities.

Fact 6: A private company must have 1 or more directors. At least 1 director needs to be ordinarily resident in Australia. There are businesses that can provide a resident director for foreign businesses that are in the process of setting up, and who don’t yet have resident employees.

Fact 7: A private company may, but is not required to, have a company secretary. It may have more than one company secretary, but this is unusual. If you decide to have a company secretary then you must comply with a residency requirement.

Fact 8: A private company must have a registered office in Australia. There are businesses that can provide a registered office in Australia.

Fact 9: Before a private company commences trading it must register with the Australian Taxation Office, and appoint a public officer. The registration procedure is complicated, but can be done online. The public officer must be ordinarily resident in Australia.

Fact 10: Formal documents in Australia usually require the signature of 2 directors or a director and company secretary. This might have an impact on the number and location of directors and company secretaries that you appoint. If a company only has 1 director, and that director is also the company secretary, then that person may alone sign formal documents.

The above information is applicable to most foreign businesses wanting to set up a commercial presence in Australia. Some businesses, in regulated fields or investing in regulated assets, may need a different structure.

Before setting up your business, get some good tax advice. Australia now has tax treaties and free trade agreements with many of its trading partners, and there may be tax concessions that apply to you.